Chinese bid for Iowa insurer hits a snag

HONG KONG - Anbang, a politically connected Chinese insurer, has hit a bump in its effort to buy an insurance company in Iowa for $1.6 billion, the latest setback to its multibillion-dollar global shopping spree.

Anbang Insurance Group has struck a remarkable spate of deals including an agreement two years ago to buy the Waldorf Astoria hotel in New York. It has also reached a $6.5 billion deal to buy hotels from the private-equity firm Blackstone Group, and it has agreed to buy financial firms in Europe and South Korea.

The Chinese insurance company - which until recent years was not well-known even in its home country - is near the forefront of a growing wave of Chinese companies buying companies abroad.

But the campaign has suffered a setback with Fidelity & Guaranty Life, the Des Moines-based insurer that Anbang agreed to buy last year. Anbang withdrew its application with the New York State Department of Financial Services to acquire the company, Fidelity said in a filing Tuesday with the Securities and Exchange Commission.

Fidelity hoped that Anbang could come back, saying the withdrawal was not final.

Paul Marriott of FTI Consulting in Hong Kong, which represents Anbang, did not have acomment on why Anbang had withdrawn its application. Fidelity did not say why Anbang withdrew.

The setback adds to Anbang's recent stumbles. In March, it abruptly ended its $14 billion bid to buy Starwood Hotels and Resorts. It said little about why it had retreated, mentioning only "various market considerations."

Anbang, which owns insurance companies, a bank and a leasing company, says it has almost $300 billion in assets; it is owned by 39 corporate shareholders. Two of the shareholders are state-owned companies, while the other 37, which own more than 95 percent of Anbang, are an opaque web of interconnected companies.

Anbang's chairman, Wu Xiaohui, married a granddaughter of Deng Xiaoping, a former Chinese leader.

Anbang must obtain regulatory approval for its takeover from states where Fidelity does business. It also has a pending application in Iowa, Fidelity said in its filing Tuesday.

Anbang's purchase of Fidelity, announced in November, was cleared by the Committee on Foreign Investment in the United States, a government panel that checks whether planned acquisitions of U.S. companies raise national security concerns, Fidelity said in March.